The Supplier of a Factor of Production Has a Reservation

question 50

Multiple Choice

The supplier of a factor of production has a reservation price of $100. The purchaser of the factor of production has a reservation price of $200. If the factor of production is unique, then:

• A)there will be no transaction since $200 is greater than $100.
• B)a transaction will occur, and the price paid for the factor of production will be $150.
• C)a transaction will occur, and the price paid for the factor of production will be $200.
• D)a transaction will occur, and the price paid for the factor of production will be $100.

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Definitions:

Shareholder Value

A corporation's commitment to increase the wealth of its stockholders by improving performance, profitability, and share price.

Employee Commitment

Refers to the level of loyalty and dedication an employee feels toward their organization.

Referent Power

A form of power that stems from personal attributes and the respect or admiration one commands from others.

Organizational Politics

The use of power, negotiation, and alliances within an organization to achieve personal or organizational goals.